The process of adding a partner in the Articles of Association of a company in the UAE is considered one of the fundamental legal procedures aligned with the growth and expansion of the company. Whether the company is a Limited Liability Company (LLC) or a Sole Proprietorship, the entry of a new partner is subject to clear legal and administrative regulations stipulated under Federal Decree-Law No. 32 of 2021 on Commercial Companies. Adding a partner in the Articles of Association of a company in the UAE is one of the most important legal amendments that companies may undergo, either during expansion or restructuring. This procedure requires precise steps, including approvals, amendment of the Articles, notarization before a notary public, and registration with the Department of Economic Development. The process of adding a partner in the Articles of Association of a company in the UAE requires a thorough legal understanding and well-defined steps to ensure compliance and prevent future disputes among partners.

Adding a partner in the Articles of Association of a company in the UAE in a Limited Liability Company (LLC)

Adding a partner in the Articles of Association of a company in the UAE in an LLC is a critical legal matter governed by Federal Decree-Law No. 32 of 2021, specifically Article 75. This step allows the company to increase its capital or attract strategic expertise, provided the following legal procedures are met:

1. Approval of existing partners holding no less than 75% of the company’s capital shares when adding a partner in the Articles of Association of a company in the UAE.

2. Amending the Articles of Association and Memorandum of Association by including the details of adding a partner in the Articles of Association of a company in the UAE, specifying the share percentage, financial contribution, and rights within the company.

3. Notarizing the amended contract before the competent notary public in the concerned Emirate.

4. Officially registering the amendment in the commercial register with the Department of Economic Development and updating the trade license.

5. Notifying official bodies such as banks, suppliers, and government entities of the amendment.

The procedures of adding a partner in the Articles of Association of a company in the UAE ensure that the new partner acquires a solid legal standing and that legal protection is provided to all parties.

Can a Partner Be Added in a Sole Proprietorship?

Yes, adding a partner in the Articles of Association of a company in the UAE is possible in a Sole Proprietorship, but this requires converting the legal entity from a Sole Proprietorship into an LLC, as stipulated under Article 71 of the Companies Law.

Procedures for Adding a Partner in the Articles of Association of a company in the UAE in a Sole Proprietorship

The process of adding a partner in the Articles of Association of a company in the UAE in a Sole Proprietorship is a vital legal step that converts the company from being owned entirely by one individual (whether a natural or legal person) into an LLC with multiple partners. The process of adding a partner in the Articles of Association of a company in the UAE is governed by Federal Decree-Law No. 32 of 2021.

According to UAE law, a Sole Proprietorship cannot continue in case of adding a partner in the Articles of Association of a company in the UAE; instead, the legal form must be amended by following these steps:

1. Drafting a new Articles of Association that includes the new partner’s details, share percentage, profit and loss distribution, and management rights.

2. Notarizing the amended contract with explicit consent from the original owner for the partner’s entry.

3. Registering the new legal form in the commercial register and converting the entity from a “Sole Proprietorship” into an “LLC.”

4. Updating the trade license, banking details, and notifications with the relevant authorities such as banks and regulatory bodies.

This change grants the company greater expansion capabilities but requires strict compliance with legal procedures to ensure proper registration and protect the interests of both new and existing partners.

Procedures for Adding a Partner in the Articles of Association of a company in the UAE in an LLC

The process of adding a partner in the Articles of Association of a company in the UAE in an LLC requires amending the Articles of Association and Memorandum of Association in accordance with Federal Decree-Law No. 32 of 2021. To execute adding a partner in the Articles of Association of a company in the UAE accurately, the following steps must be observed:

• Obtaining Partner Approval: The law requires approval from partners holding no less than 75% of total capital shares when adding a partner in the Articles of Association of a company in the UAE.

• Drafting an Amended Articles of Association: The amended contract must include the new partner’s information, capital contribution, profit/loss distribution, and any changes in management or legal representation.

• Notarizing the Contract: The amended Articles must be signed by all partners and notarized before the competent notary public to ensure legal validity.

• Registering the Amendment: The amended contract must be submitted to the Department of Economic Development to update the commercial register and trade license, securing the new partner’s legal status.

• Updating Official Records: All relevant entities, including banks, suppliers, government bodies, and insurance institutions, must be notified of the structural changes following adding a partner in the Articles of Association of a company in the UAE.

Legal Timeline for Registration

The amendment for adding a partner in the Articles of Association of a company in the UAE must be registered with the Department of Economic Development within 15 days of signing and official notarization.

Is Unanimous Approval Required?

No, unanimous approval is not mandatory. The law requires the consent of partners holding at least 75% of the company’s capital shares for adding a partner in the Articles of Association of a company in the UAE, unless a higher threshold is specified in the Articles of Association.

Conclusion

Adding a partner in the Articles of Association of a company in the UAE is a detailed legal procedure that requires full compliance with applicable laws and regulations. Whether your company is a Sole Proprietorship or an LLC, any modification in ownership structure must be carried out through an official process that guarantees the protection of all rights, consult a specialized law firm such as Samaha Law Firm for Legal Consultations, contact us via phone or whatsapp.